Fair Work Commission|2025-08-08

Jorge Borlandelli v Sydney Luxury Smash Repairs Pty Ltd [2025] FWC 2323 (8 August 2025)

ss.400A, 401, and 611 - Costs applications

Unfair dismissal - compensation ordered - costs applications filed by both parties - costs order made against employer.

[1] On 26 May 2025, I issued a decision[1] which found Jorge Borlandelli was unfairly dismissed from his employment as a panel beater with Sydney Luxury Smash Repairs Pty Ltd (SLSR) on 24 October 2024. I ordered SLSR to pay Mr Borlandelli $5,441.64 less taxation, plus superannuation of $625.79.

[2] Mr Borlandelli filed an application for costs on 6 June 2025. Mr Borlandelli's application is made pursuant to ss.400A, 401, and 611 of the Fair Work Act 2009 (FW Act).

[3] SLSR filed an application for costs on 3 July 2025. The application was made pursuant to ss.400A and 401 of the FW Act.

Section 400A - unreasonable acts or omissions in connection with the conduct of the matter

[4] Section 400A of the FW Act states as follows:

(1) The FWC may make an order for costs against a party to a matter arising under this Part (the first party ) for costs incurred by the other party to the matter if the FWC is satisfied that the first party caused those costs to be incurred because of an unreasonable act or omission of the first party in connection with the conduct or continuation of the matter.

(2) The FWC may make an order under subsection (1) only if the other party to the matter has applied for it in accordance with section 402.

(3) This section does not limit the FWC's power to order costs under section 611."

[5] A Full Bench in Gugiatti v SolarisCare Foundation Ltd[2] provided the following guidance as to the application of s.400A:

"Section 400A(1) establishes two pre-conditions for the making of an order for costs under the subsection (in addition to the requirement in s.400A(2)). The first is that the Commission must be satisfied that a party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter. The second is that such act or omission caused the other party to the matter to incur costs. Once these preconditions are satisfied, a discretionary power to order the payment of such costs is enlivened."

Section 401 - conduct by lawyers and paid agents

[6] Section 401 of the FW Act provides as follows:

"Costs orders against lawyers and paid agents

(1) This section applies if:

(a) an application for an unfair dismissal remedy has been made under section 394; and

(b) a person who is a party to the matter has engaged a lawyer or paid agent (the representative) to represent the person in the matter; and

(1A) The FWC may make an order for costs against the representative for costs incurred by the other party to the matter if the FWC is satisfied that the representative caused those costs to be incurred because:

(a) the representative encouraged the person to start, continue or respond to the matter and it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or

(b) of an unreasonable act or omission of the representative in connection with the conduct or continuation of the matter.

(2) The FWC may make an order under this section only if the other party to the matter has applied for it in accordance with section 402.

(3) This section does not limit the FWC's power to order costs under section 611."

[7] Deputy President Slevin recently provided the following summary of authorities concerning the operation of s.401 of the FW Act in Australian Concert and Entertainment Security Pty Ltd v Michael Alkan:[3]

"I consider the following matters to arise from the authorities referred to above:

(a) The general rule under the Act is that parties before the Commission bear their own costs. Exceptions to that rule allow costs to be awarded by the Commission in limited circumstances.

(b) Those exceptions include under s. 401 where, in unfair dismissal proceedings, where a lawyer or paid agent has caused costs to be incurred due to unreasonable acts or omissions. Whether a party has conducted itself or the litigation in such a way as to cross this threshold will depend on the particular circumstances of the case.

(c) Whether an act or omission is reasonable will be informed by its context and requires an evaluative assessment of all relevant circumstances. Unreasonable acts or omissions may include but are not limited to; rejecting offers of settlement, failing to attend proceedings, refusing offers of settlement, continuing proceedings which have little prospects of success, and discontinuing proceedings late.

(d) The act or omission must result in costs being incurred.

(e) Even if the criteria for a costs order are satisfied the Commission has discretion in deciding to make an order and the form of that order. In exercising the discretion, the Commission should be mindful of the purpose of s 401 which includes, but is not limited to, to act as a disincentive to lawyers or paid agents from causing costs to be incurred by other parties through unreasonable acts or omissions and to hold lawyers and paid representatives accountable for their acts and omissions.

(f) In the case of paid agents, who are not otherwise subject to professional standards, the Commission should exercise its functions in a manner that ensures that representatives conduct is consistent with the applicable professional obligations of lawyers in equivalent circumstances."

Section 611 - general costs provision - commencing or responding to proceedings vexatious or without reasonable cause - no reasonable prospect of success

[8] Section 611 of the FW Act provides as follows:

(1) A person must bear the person's own costs in relation to a matter before the FWC.

(2) However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:

(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person's application, or the first person's response to the application, had no reasonable prospect of success."

[9] In Hansen v Calvary Health Care Adelaide Limited[4] a Full Bench said in relation to s.611 generally:

"It is trite to observe that the statutory and policy imperative underpinning a costs application under the Act, is that a person in a matter before the Commission must bear their own costs. So much is plainly obvious by the precise and unambiguous language of s 611(1).

However, the statutory scheme sets out the relatively circumscribed circumstances in which an order for costs might be found by the Commission to be appropriate in a particular case. It includes the exercise of discretionary power where the Commission is satisfied that one, or more of the circumstances set out in s 611(2), has been established. If such circumstances are established, the Commission, in the broad exercise of its discretion, may make an order that a person/s bear some, or all of the costs of another person, in relation to the application, including on an indemnity basis, or decline to make any order at all."[5]

[10] The principles concerning the interpretation and application of s 611(2)(a) were comprehensively stated in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing[6] and then summarised in the following terms by a Full Bench in Chapman v Ignis Labs Pty Ltd[7]:

An application is made vexatiously when the predominant motive or purpose of the applicant is to harass or embarrass the other party or to gain a collateral advantage.

An application is not made without reasonable cause simply because the application did not succeed.

Whether an application is made without reasonable cause may be tested by asking, on the facts apparent to the applicant at the time the application was made, whether there was no substantial prospect of success.

If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to characterise the application as having been made without reasonable cause.

In relation to an appeal, the question becomes whether the appeal has no substantial prospect of success. The prospect of success must be evaluated in the light of the facts of the case, the judgment appealed from, and the points taken in the notice of appeal. If there is a not insubstantial prospect of the appeal achieving some success, it cannot fairly be described as having been made without reasonable cause.

An application will have been made without reasonable cause if it can be characterised as so obviously untenable that it cannot possibly succeed, is manifestly groundless or discloses a case where the tribunal is satisfied it cannot succeed.

[11] The principles that are relevant to s.611(2)(b) were summarised in the following terms by a Full Bench in Baker v Salva Resources Pty Ltd[8]:

"The concepts within s.611(2)(b) 'should have been reasonably apparent' and 'had no reasonable prospect of success' have been well traversed:

'should have been reasonably apparent' must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test; and

• A conclusion that an application 'had no reasonable prospect of success' should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable."[9]

Unreasonable acts or omissions in connection with the conduct of the matter: s.400A

[12] Mr Borlandelli referred to settlement negotiations in December 2024 and January 2025 where he made offers to settle his unfair dismissal application and an underpayment claim concerning his termination payments. The email correspondence suggests that SLSR indicated it intended to accept an offer from Mr Borlandelli but this position was never confirmed by Jackson Pierce (Owner and Director). Mr Borlandelli argued SLSR acted unreasonably in not accepting his settlement offers, that SLSR failed to articulate its reasons for not agreeing to a proposed deed, and SLSR failed to make any counter offers.

[13] Mr Borlandelli argued SLSR acted unreasonably when filing four production order applications on 12 February 2025 and then in not withdrawing the applications when relevance issues were raised by Mr Borlandelli and provisionally by the Commission.

[14] Mr Borlandelli argued SLSR acted unreasonably by failing to file evidence and submissions on 21 February 2025 in accordance with the Commission's directions and that this caused the hearing date of 6 March 2025 to be vacated and replaced with a directions hearing.

[15] Mr Borlandelli argued SLSR acted unreasonably because Mr Pierce was not available to attend a listed hearing on 28 April 2025 to give evidence and that this resulted in a further hearing date being required on 15 May 2025.

[16] Mr Borlandelli argued each unreasonable act by SLSR identified above caused him to incur additional legal costs.

[17] Mr Borlandelli argued that SLSR's legal representative, Green & Associates Solicitors (GAS), acted unreasonably in not complying with the Commission's direction for SLSR to file its material by 21 February 2025 because it was awaiting the outcome of its four production order applications.

[18] Mr Borlandelli argued GAS acted unreasonably in continuing to pursue the production order applications when it should have been reasonably apparent that the applications had no reasonable prospect of success.

[19] Mr Borlandelli argued that it should have been reasonably apparent to GAS based on the material filed by SLSR that SLSR had no reasonable prospects of defending the unfair dismissal application.

Vexatious response or without reasonable cause, no prospect of success: s.611

[20] Mr Borlandelli argued SLSR was put on notice in December 2024 that it had no reasonable prospect of defending his unfair dismissal application because of text messages between Mr Borlandelli and Mr Pierce which record that SLSR dismissed Mr Borlandelli because he was absent from work due to a back injury.

Unreasonable acts or omissions in connection with the conduct of the matter: ss.400A and 401

[21] SLSR referred to Mr Borlandelli not accepting an unidentified settlement offer on 17 December 2024 as unreasonable conduct by Mr Borlandelli and his legal representative, Berrigan Doube Lawyers (BDL).

[22] SLSR argued Mr Borlandelli and BDL acted unreasonably in not voluntarily agreeing to provide the documents sought in its four production order applications.

[23] SLSR argued Mr Borlandelli and BDL acted unreasonably in pursuing concurrent proceedings in the Federal Circuit and Family Court of Australia concerning alleged underpayments.

[24] SLSR argued Mr Borlandelli and BDL acted unreasonably in proceeding with the unfair dismissal application after Mr Borlandelli was put on notice that he had already been compensated via workers' compensation payments.

[25] SLSR argued each unreasonable act by Mr Borlandelli and BDL identified above caused it to incur additional legal costs.

Unreasonable acts or omissions in connection with the conduct of the matter: s.400A

[26] I do not accept the evidence establishes that SLSR acted unreasonably in not agreeing to the settlement offers made by Mr Borlandelli. Mr Borlandelli's settlement offers were higher than the relief Mr Borlandelli ultimately achieved in relation to his unfair dismissal application. I do not think it is open to find that SLSR unreasonably rejected settlement offers that exceeded the relief granted by the Commission.

[27] SLSR's conduct in defending the unfair dismissal application is more difficult to assess.

[28] As identified in the unfair dismissal decision,[10] the evidence provided by Mr Borlandelli to confirm the workers' compensation payments he had received since being dismissed by SLSR was incomplete. These payments were clearly relevant to the assessment of compensation by the Commission. If SLSR had sought production of documents confirming the payments made to Mr Borlandelli, I would have been highly likely to make a production order regarding this evidence.

[29] However, the four production order applications filed by SLSR were primarily directed at evidence regarding Mr Borlandelli's workers' compensation claim. SLSR sought records regarding when Mr Borlandelli attended his regular gym. SLSR sought medical records regarding Mr Borlandelli's injury from a medical practice and from iCare. SLSR sought Mr Borlandelli's bank records, but this request was made to explore whether Mr Borlandelli had spent money on activities that were inconsistent with his alleged injury. The production order applications repeatedly refer to Mr Borlandelli's workers' compensation claim in the grounds and reasons.

[30] The production orders sought by SLSR were misguided. I consider the applications were clearly directed at obtaining evidence that sought to undermine Mr Borlandelli's claim that he injured his back while working for SLSR. Mr Borlandelli's workers' compensation claim was filed after he had been dismissed by SLSR. The making of the workers' compensation claim was not relevant to assessing the merits of Mr Borlandelli's unfair dismissal application. I consider it was unreasonable for SLSR to make the four production order applications.

[31] I consider it was clearly unreasonable for SLSR not to file evidence and submissions by 21 February 2025 in accordance with the Commission's directions. SLSR did not apply for an extension of time to file its material. It appears SLSR assumed it did not need to file its material because the four production order applications had not been determined. There was no basis for that assumption. SLSR's conduct in not complying with the directions directly caused the hearing listed for 6 March 2025 to be vacated and replaced with a directions hearing.

[32] I also consider SLSR acted unreasonably in failing to ensure Mr Pierce was available to attend the hearing on 28 April 2025 to give evidence. SLSR did not provide the Commission or Mr Borlandelli with any prior notice that Mr Pierce could not attend the hearing on 28 April 2025. Mr Pierce's non-attendance on 28 April 2025 impacted how the hearing on 28 April 2025 was conducted and potentially prevented the Commission from being able to hear all the evidence on 28 April 2025. Mr Pierce confirmed during his evidence on 15 May 2025 that he had decided to travel to Northern NSW with his family despite being aware of the hearing date.

[33] Given I have found SLSR acted unreasonably on three separate occasions during the conduct of Mr Borlandelli's application, I am required to consider whether SLSR's actions caused Mr Borlandelli to incur costs.

[34] SLSR's first unreasonable act occurred on 12 February 2025 when it filed four production order applications that were primarily directed at contesting Mr Borlandelli's workers' compensation claim. That means the costs incurred by Mr Borlandelli prior to 12 February 2025 were not caused by unreasonable actions by SLSR.

[35] I consider most of the costs Mr Borlandelli incurred from 12 February 2025 until the last hearing date on 15 May 2025 were an inevitable result of being legally represented in relation to the unfair dismissal application. The most significant costs were associated with reviewing SLSR's evidence, preparing evidence in reply, preparing for the hearings on 28 April 2025 and 15 May 2025, and attendance at the hearings.

[36] I accept SLSR's submission that Mr Pierce's failure to attend the hearing on 28 April 2025 was not the sole reason that a second hearing date had to be listed for 15 May 2025. I do not consider the evidence and closing submissions could have been completed on 28 April 2025 even if Mr Pierce had been in attendance. It may have been possible to complete Mr Pierce's evidence, but written closing submissions or a further hearing date would almost certainly have been required. As a result, I am not satisfied that SLSR's conduct in not ensuring Mr Pierce attended the hearing on 28 April 2025 caused Mr Borlandelli to incur costs.

[37] After reviewing BDL's itemised invoice which was filed by Mr Borlandelli in support of his application, I consider the unreasonable actions of SLSR caused Mr Borlandelli to incur the following costs:

$1,125.00 plus GST for a conference call and work associated with the four production order applications on 12 February 2025.

$900.00 plus GST for work on 3 March 2025 to prepare for the substantive hearing listed for 6 March 2025.

$315.00 plus GST for a conference call on 4 March 2025 to discuss SLSR's adjournment request.

$450.00 plus GST for attending a directions hearing on 6 March 2025 that was required because SLSR failed to comply with the Commission's directions.

$990.00 plus GST on 23 April 2025 for work in response to a letter from SLSR regarding the production order applications.

$900.00 plus GST on 23 April 2025 for preparation for an interim hearing regarding the production order applications on 24 April 2025.

$315.00 plus GST for attending an interim hearing regarding the production order applications on 24 April 2025.

[38] Although SLSR submitted that Mr Borlandelli was not aware of the production order applications based on a response he provided during cross-examination on 28 April 2025,[11] I prefer the evidence from BDL's invoice which indicates there was a conference call with Mr Borlandelli on 12 February 2025 to discuss the applications. The invoice is a legal document prepared by a law firm. Further, Mr Borlandelli was being questioned about the validity of a medical certificate when he provided the relevant evidence and Mr Green had just put to him that he had edited a medical certificate using Adobe. I consider Mr Borlandelli was confused by the question and I do not consider his answer to be a concession that he was not aware of the four production order applications.

[39] I have found that SLSR's unreasonable actions caused Mr Borlandelli to incur costs of $4,995.00 plus GST of $499.50.

[40] I am not satisfied that GAS is responsible for the unreasonable actions from SLSR that I have identified above. Mr Pierce has clearly taken quite a hostile approach to Mr Borlandelli's unfair dismissal application and has demonstrated a limited amount of respect for the Commission and its processes. I consider Mr Pierce and SLSR should be accountable for the unreasonable actions and not GAS.

Vexatious, without reasonable cause, no reasonable prospect of success

[41] I am not satisfied that SLSR responded to Mr Borlandelli's unfair dismissal application vexatiously or without reasonable cause, or that it should have been reasonably apparent that their response had no reasonable prospect of success.

[42] SLSR provided a reasonably significant amount of evidence in support of its argument that Mr Borlandelli's poor performance provided a valid reason for his dismissal. SLSR also succeeded in arguing that Mr Borlandelli's workers' compensation payments should reduce the amount of any compensation order.

[43] I do not consider a costs order can be made against SLSR pursuant to s.611 of the FW Act given the circumstances of this case.

[44] SLSR seeks costs orders against Mr Borlandelli pursuant to s.400A and 401 of the FW Act. SLSR's application was filed on 2 July 2025.

An application for an order for costs under section 611 in relation to a matter arising under this Part, or for costs under section 400A or 401, must be made within 14 days after:

[46] Given Mr Borlandelli's application was determined on 26 May 2025, SLSR's costs application needed to be made within 14 days of that date. SLSR missed that deadline. There is no power in the FW Act to extend the 14-day filing deadline.

[47] It does not appear there is jurisdiction to deal with SLSR's costs application because it was not filed within 14 days of when the Commission determined the matter.

[48] In any event, I would not make a costs order against Mr Borlandelli or BDL in this case.

[49] Mr Borlandelli succeeded with his unfair dismissal application and was awarded a remedy of compensation. I do not consider Mr Borlandelli or BDL acted unreasonably in relation to settlement negotiations or the conduct of the matter. Mr Borlandelli complied with the Commission's directions for the filing of material and attended all listed proceedings.

[50] I consider Mr Borlandelli's opposition to producing the documents sought in SLSR's production order applications was justified given the documents sought were primarily directed at contesting Mr Borlandelli's workers' compensation claim.

[51] I consider Mr Borlandelli's separate underpayment proceedings in the Federal Circuit and Family Court of Australia have no bearing on whether costs should be awarded in relation to his unfair dismissal application. The Commission does not have jurisdiction to make the underpayment orders sought by Mr Borlandelli in the court proceeding.

[52] I consider SLSR's application for costs against Mr Borlandelli should be dismissed.

[53] The discretionary power in s.400A of the FW Act to order SLSR to pay costs to Mr Borlandelli is triggered in this case because SLSR engaged in unreasonable acts that caused Mr Borlandelli to incur costs of $4,995.00 plus GST of $499.50.

[54] I consider it is appropriate to make an order requiring SLSR to pay Mr Borlandelli an amount of $4,995.00 plus GST of $499.50.

[55] I consider a costs order reflecting these amounts is appropriate having regard to SLSR's conduct in filing four production order applications that were primarily directed at contesting Mr Borlandelli's workers' compensation claim and for failing to file material in accordance with the Commission's directions. These unreasonable acts caused Mr Borlandelli to incur the costs identified above.

[56] I am satisfied the costs ordered do not exceed the maximum amounts prescribed in Schedule 3.1 of the Fair Work Regulations 2009.

[57] An order requiring SLSR to pay Mr Borlandelli $4,995.00 plus GST of $499.50 within 14 days will be issued in conjunction with this decision.[12]

[58] SLSR's application for costs is dismissed.

Mr D Garan from Berrigan Doube Lawyers representing Mr Borlandelli.

Mr D Green from Green & Associates representing SLSR.

[1] Jorge Borlandelli v Sydney Luxury Smash Repairs Pty Ltd [2025] FWC 1428.

[10] Jorge Borlandelli v Sydney Luxury Smash Repairs Pty Ltd [2025] FWC 1428 at [57].

[11] Transcript for 28 April 2025 at PN217-219.

Printed by authority of the Commonwealth Government Printer

Work Regulations 2009

Jorge Borlandelli v Sydney Luxury Smash Repairs Pty Ltd [2025] FWC 2323

At a glance

Court

Decision date

Source

Judgment (129 paragraphs)

Jorge Borlandelli v Sydney Luxury Smash Repairs Pty Ltd [2025] FWC 2323 (8 August 2025)

Parties

Legislation Cited (2)